DTN Early Word Livestock Comments 10/26 06:35
Futures May Hold at Current Levels
Cattle moved higher as expected due to the report on Friday, but it was a
bit disappointing that futures were not able to move higher than they did. Hogs
struggled all day with the exception of December, which held gains likely due
to spread trading.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $211.88 +0.64*
Hogs: Steady Futures: Mixed Lean Equiv: $101.55 -3.69**
*Based on formula estimating live cattle equivalent of gross packer revenue.
(The Live Cattle Equiv. Index has been updated to depict recent changes in
live cattle weights and grading percentages.)
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle futures were the recipients of the friendly Cattle on Feed report,
but gains were limited. Futures moved back to where they had been the day
before the report. There are still a lot of cattle that will be available to
the market over the coming months. The strength is not going to come from the
report but from increased demand and more positive cash and boxed beef prices.
Monday, boxed beef was higher with choice up $1.22 and select up $0.08. Traders
will need to see this continue as evidence of increasing demand. There was no
indication of cash potential this week as bids or offers have not been posted.
However, showlists appear to be light. The inability of futures to push higher
than they have may leave packers unwilling to bid higher than steady money
again this week. The Commitment of Traders report showed funds adding to their
long positions by 9,258 contracts increasing their net-long positions to 44,727
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